While the BRICS alliance has cooled down on pushing local currencies for global trade, China is doing the opposite and is aggressively pursuing various means to promote the Chinese yuan in global trade, and Africa is its growing destination. While 60% of Africa’s balance sheet consists of the US dollar, the Chinese yuan is making its way through.
However, transacting in the US dollar is becoming an expensive affair for Africa in recent times. The continent settles all major imports in the US dollar but spends roughly $5 billion a year in transaction fees. The currency conversion is costly and eats up a larger share of the revenue pie. To ease finances, BRICS member China has allowed currency swaps in the Chinese yuan for countries in Africa.
Apart from transaction fees, the US dollar also comes with other risks, including high debt and inflation. Africa is now seeking to diversify its trade settlement mechanism to address these concerns. The alternative to the US dollar comes from the Chinese yuan, which the BRICS member is pushing.
Also Read: BRICS Credibility Tested: India Pressured by Iran to Act on Conflict
BRICS: Africa’s Imports From China Rise by 27%, Usage of Chinese Yuan Grows
In 2025, Africa became China’s fastest-growing export market, with Chinese goods rising by over 27%. To keep up with the momentum, BRICS member China announced a zero-tariff policy for Africa for using the Chinese yuan. The development accelerated trade between the two, leading to an expansion in the movement of goods.
China is leveraging the trade and tariff tensions to its benefit by putting its local currency to work. Among the 11-member BRICS alliance, China is now the only country to push the Chinese yuan for trade. The other 10 nations have scaled back in fear of tariffs from Trump. They also bagged trade deals with the US on this very condition.
